- Cross-border corporations, eh? Looks like Gordon Brown's going to have to revise his figures again now that Marks & Spencer have got a favourable ruling allowing them to offset losses in other EU countries against UK profits:
"These cases are just the tip of the iceberg... There is an increasing trend for national tax legislation to be challenged in the European court and each case could prove costly to the UK exchequer"The upshot? Tax rises all round, most likely, though some are predicting this could be the start of some form of EU-wide tax harmonisation, one of those long-lurking monsters under the European bed. Tax, eh? It's great! (Speaking of which, anyone want to become my accountant? I can offer to pay you precisely no money, thanks to being utterly broke.)
Update: Jerome a Paris points out another possibility:
"What this could mean is that companies will be authorised to centralise their profits in an affiliate in European country with the lowest tax rates, and pay taxes only there, by creating losses (fairly easy with smart transfer pricing when you have subsidiaries all over the place) in high tax jurisdictions and profit in others."So then, how do I go about setting up subsidiaries to myself in countries with low taxes?
2 Comments:
About time too. We pay far too much in taxes.
Oh, it's being spun. It's a big deal for M&S, but it's too restrictive a judgment to be that usable by most companies. The interesting thing is that in past EU tax cases, the EUCJ has been very reluctant to override the freedom of capital movement articles in the treaty. To actually do so in the name of national interest is a surprising pull-back from the trend in European jurisprudence in recent years.
Certainly, some of the cheekier cases going up to the EUCJ should be getting concerned. (Naming no multinational confectionary manufacturers.)
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